June 14, 2024

Athens News

News in English from Greece

The most important for Russian importers, the Chinese Chouzhou Commercial Bank, announced the suspension of operations with the Russian Federation and Belarus

Last week, managers of Chouzhou Commercial Bank (China) notified clients of the termination of any relations with Russian and Belarusian organizations.

About it reports Vedomosti publication, citing businessmen, financial consultants and business associations. The owner of one Russian company complained: “We’ve already had several deals fall through because of this.”

Another interlocutor of the publication, an entrepreneur from Izhevsk, who purchases equipment for machine tools in China, said: in December, he was informed in Chouzhou that payments were stopped for a certain list of goods, the import of which into the Russian Federation is prohibited by sanctions. However, after a few weeks, the bank manager announced the complete cessation of settlements with Russia, regardless of the product or currency of payment.

As the newspaper notes, Chouzhou has become the main settlement center for importers due to relatively soft conditions.

Let us recall that in December 2023, US President Joe Biden signed a decree that significantly simplified it for the United States Treasury Department to impose restrictions on banks violating sanctions against Russia. After this, fearing secondary sanctions, they began to refuse to work with Russian banks Turkish financial organizations.

In January, similar problems began to arise with Chinese banks. In particular, state-owned Chinese banks, Bloomberg wrote, decided to tighten the conditions for providing services to Russian clients.

At the same time, Beijing did not join sanctions against the Russian Federation in response to its full-scale invasion of Ukraine at the official level. However, after the introduction of restrictions, Chinese banks reduced work with Russian clients who are under sanctions.

For example, cards of the Chinese payment system Union Pay, issued by Russian banks that were included in the sanctions lists, stopped working abroad. In the summer of 2023, Russian financial organizations faced a ban on making transfers, including in yuan, to Europe and the United States through the Bank of China.

One of the publication’s sources noted that settlements do not depend on the payment system – transactions have been stopped not only using SWIFT, but also with the Russian SPFS and the Chinese CIPS. He explained:

“Even if the movement of money through national systems is not visible to Americans or Europeans, all this is clearly reflected in the reporting that Western counterparties may require from the bank.”

This is confirmed by Iskander Mirgalimov, a consultant on foreign trade settlements. Information on cash and commodity flows between China and Russia is available to Western regulators even if the counterparties do not use SWIFT. SWIFT is putting pressure on the Chinese CIPS and is requesting information about the volume of financial transactions with Russia, he said, referring to representatives of Chinese banks.

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